Proper Joint Cost Allocations for Inventory Costing and Cost-Of-Goods-Sold Computations

question 111

Multiple Choice

Proper joint cost allocations for inventory costing and cost-of-goods-sold computations are important because

• A) inventory costing is essential for proper balance sheet presentation.
• B) divisional profitability may affect compensation for divisional managers.
• C) cost of goods sold is an important component in the determination of net income.
• D) the information may be required for insurance settlement or litigation.
• E) All of the above are correct.

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